BILL NUMBER: SB 2111	CHAPTERED  09/20/00

	CHAPTER   560
	FILED WITH SECRETARY OF STATE   SEPTEMBER 20, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 18, 2000
	PASSED THE SENATE   AUGUST 28, 2000
	PASSED THE ASSEMBLY   AUGUST 23, 2000
	AMENDED IN ASSEMBLY   AUGUST 18, 2000
	AMENDED IN SENATE   MAY 23, 2000
	AMENDED IN SENATE   APRIL 13, 2000

INTRODUCED BY   Senator Dunn
   (Coauthor:  Assembly Member Shelley)

                        FEBRUARY 25, 2000

   An act to amend Sections 10234.6 and 10234.95 of the Insurance
Code, relating to long-term care insurance, and declaring the urgency
thereof, to take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 2111, Dunn.  Long-term care insurance:  rate guide:  data
collection.
   Existing law requires the Insurance Commissioner to annually
prepare a consumer rate guide for consumers for long-term care
insurance, as specified, beginning on December 1, 2000.  Existing law
requires each insurer to provide, and the Department of Insurance to
collect, specified data on long-term care policies and certificates,
including all policies, whether issued by the insurer or purchased
or acquired from another insurer, in the United States, on or after
January 1, 1990.  Existing law requires insurers to include, in the
premium section of long-term care insurance personal worksheets,
information on any increases or requests for increases in rates of
prior policies sold in any state by the insurer.
   This bill would revise these provisions by requiring the consumer
rate guide to consist of a rate history portion and a policy
comparison portion, as specified.  This bill would require the
premium section of long-term care insurance personal worksheets to
include a reference to the consumer rate guide and where a copy may
be obtained.  This bill would make other related changes.
   This bill would declare that it is to take effect immediately as
an urgency statute.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 10234.6 of the Insurance Code is amended to
read:
   10234.6.  (a) The commissioner shall, by June 1 of each year,
jointly design the format and content of a consumer rate guide for
long-term care insurance with a working group that includes
representatives of the Health Insurance Counseling and Advocacy
Program, the insurance industry, and insurance agents.  The
commissioner shall annually prepare the consumer rate guide for
long-term care insurance that shall include, but not be limited to,
the following information:
   (1) A comparison of the different types of long-term care
insurance and coverages available to California consumers.
   (2) A premium history of each insurer that writes long-term care
policies for all the types of long-term care insurance and coverages
issued by the insurer in each state.
   (b) The consumer rate guide to be prepared by the commissioner
shall consist of two parts:  a history of the rates for all policies
issued in the United States on or after January 1, 1990, and a
comparison of the policies, benefits, and sample premiums for all
policies currently being issued for delivery in California.
   (1) For the rate history portion of the rate guide required by
this section, the department shall collect, and each insurer shall
provide to the department, all of the following information for each
long-term care policy, including all policies, whether issued by the
insurer or purchased or acquired from another insurer, issued in the
United States on or after January 1, 1990:
   (A) Company name.
   (B) Policy type.
   (C) Policy form identification.
   (D) Dates sold.
   (E) Date acquired (if applicable)
   (F) Premium rate increases requested.
   (G) Premium rate increases approved.
   (H) Dates of premium rate increase approvals.
   (I) Any other information requested by the department.
   (2) For the policy comparison portion of the rate guide required
by this section, the department shall collect, and each insurer shall
provide to the department, the information needed to complete the
following form, along with any other information requested by the
department, for each long-term care policy currently issued for
delivery in California, including all policies, whether issued by the
insurer or purchased or acquired from another insurer:
   If an insurer does not offer a policy for sale that fits the
criteria set forth in the sample premium portion of the policy
comparison section of the rate guide, the department shall include in
that section of the form for that policy a statement explaining that
a policy fitting that criteria is not offered by the insurer and
that the consumer may seek, from an agent, sample premium information
for the insurer's policy that most closely resembles the policy in
the sample.
   The department shall use the format set forth in this section for
the policy comparison portion of the rate guide, unless the working
group convened pursuant to subdivision (a) designs an alternative
format and agrees that it should be used instead.
   In compiling the policy comparison portion of the rate guide, the
department shall separate the group policies from the individual
policies available for sale so that group policies for all insurers
appear together in the guide and individual policies for all insurers
appear together in the guide.
   The policy comparison portion of the rate guide shall contain a
cross-reference for each policy form listed indicating the page in
the rate guide where rate information on the policy form can be
found.
   (c) Insurers shall provide the information required pursuant to
subdivision (b) no later than July 31 of each year, commencing in
2000.
   (d) The consumer rate guide shall be published no later than
December 1st of each year commencing in 2000, and shall be
distributed using all of the following methods:
   (1) Through Health Insurance Counseling and Advocacy Program
(HICAP) offices.
   (2) By telephone using the department's consumer toll-free
telephone number.
   (3) On the department's Internet web site.
   (4) A notice in the Long-Term Care Insurance Personal Worksheet
required by Section 10234.95.
   (e) Notwithstanding any other provision of law, the data submitted
by insurers to the department pursuant to this section are public
records, and shall be open to inspection by members of the public
pursuant to the procedures of the California Public Records Act.
However, a trade secret, as defined in subdivision (d) of Section
3426.1 of the Civil Code, is not subject to this subdivision.
  SEC. 2.  Section 10234.95 of the Insurance Code is amended to read:

   10234.95.  (a) Every insurer or other entity marketing long-term
care insurance shall:
   (1) Develop and use suitability standards to determine whether the
purchase or replacement of long-term care insurance is appropriate
for the needs of the applicant.
   (2) Train its agents in the use of its suitability standards.
   (3) Maintain a copy of its suitability standards and make them
available for inspection upon request by the commissioner.
   (b) The agent and insurer shall develop procedures that take into
consideration, when determining whether the applicant meets the
standards developed by the insurer, the following:
   (1) The ability to pay for the proposed coverage and other
pertinent financial information related to the purchase of the
coverage.
   (2) The applicant's goals or needs with respect to long-term care
and the advantages and disadvantages of insurance to meet these goals
or needs.
   (3) The value, benefits, and costs of the applicant's existing
insurance, if any, when compared to the values, benefits, and costs
of the recommended purchase or replacement.
   (c) (1) The issuer, and where an agent is involved, the agent,
shall make reasonable efforts to obtain the information set out in
subdivision (b).  The efforts shall include presentation to the
applicant, at or prior to application, of the "Long-Term Care
Insurance Personal Worksheet," contained in the Long-Term Care
Insurance Model Regulations of the National Association of Insurance
Commissioners.  The personal worksheet used by the insurer shall
contain, at a minimum, the information in the NAIC worksheet in not
less than 12-point type.  The insurer may request the applicant to
provide additional information to comply with its suitability
standards.
   (2) In the premium section of the personal worksheet, the insurer
shall disclose all rate increases and rate increase requests for all
policies, whether issued by the insurer or purchased or acquired from
another insurer, in the United States on or after January 1, 1990.
   (3) The premium section shall include a statement that reads as
follows: "A rate guide is available that compares the policies sold
by different insurers, the benefits provided in those policies, and
sample premiums.  The rate guide also provides a history of the rate
increases, if any, for the policies issued by different insurers in
each state in which they do business, since January 1, 1990.  You can
obtain a copy of this rate guide by calling the Department of
Insurance's consumer toll-free telephone number (1-800-927-HELP), by
calling the Health Insurance Counseling and Advocacy Program (HICAP)
toll-free telephone number (1-800-434-0222), or by accessing the
Department of Insurance's Internet web site (www.insurance.ca.gov)."
If the personal worksheet is approved prior to the availability of
the rate guide, the worksheet shall indicate that the rate guide will
be available beginning December 1, 2000.
   (4) A copy of the issuer's personal worksheet shall be filed and
approved by the commissioner.  A new personal worksheet shall be
filed and approved by the commissioner each time a rate is increased
in California and each time a new policy is filed for approval by the
commissioner.  The new personal worksheet shall disclose the amount
of the rate increase in California and all prior rate increases in
California as well as all prior rate increases and rate increase
requests or filings in any other state.  The new personal worksheet
shall be used by the insurer within 60 days of approval by the
commissioner in place of the previously approved personal worksheet.

   (d) A completed personal worksheet shall be returned to the issuer
prior to the issuer's consideration of the applicant for coverage,
except the personal worksheet need not be returned for sale of
employer group long-term care insurance to employees and their
spouses and dependents.
   (e) The sale or dissemination outside the company or agency by the
issuer or agent of information obtained through the personal
worksheet is prohibited.
   (f) The issuer shall use the suitability standards it has
developed pursuant to this section in determining whether issuing
long-term care insurance coverage to an applicant is appropriate.
   (g) Agents shall use the suitability standards developed by the
insurer in marketing long-term care insurance.
   (h) If the issuer determines that the applicant does not meet its
financial suitability standards, or if the applicant has declined to
provide the information, the issuer may reject the application.
Alternatively, the issuers shall send the applicant a letter similar
to the "Long-Term Care Insurance Suitability Letter" contained in the
Long-Term Care Model Regulations of the National Association of
Insurance Commissioners.  However, if the applicant has declined to
provide financial information, the issuer may use some other method
to verify the applicant's intent.  Either the applicant's returned
letter or a record of the alternative method of verification shall be
made part of the applicant's file.
   (i) The insurer shall report annually to the commissioner the
total number of applications received from residents of this state,
the number of those who declined to provide information on the
personal worksheet, the number of applicants who did not meet the
suitability standards, and the number who chose to conform after
receiving a suitability letter.
   (j) This section shall not apply to life insurance policies that
accelerate benefits for long-term care.
  SEC. 3.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect.  The facts constituting the necessity are:
   In order for the provisions of this act to be applicable prior to
the publishing of the consumer rate guide on December 1, 2000, it is
necessary for this act to take effect immediately.
